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REAL ESTATE Vitalia is disrupting senior housing with 10 communities for people over age 50.

SPORTS: NCAA tournament berth pays off for mid-major schools. PAGE 2

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CRAINSCLEVELAND.COM I APRIL 4, 2022

Colleges optimistic on Intel’s investment

‘HELPING PEOPLE ACHIEVE THEIR DREAMS’

$50 million earmarked for state’s institutions

BY AMY MORONA

Manufacturing Works aims to prepare a diverse group of potential future business owners. Page 10 Conor Hawkins works in the product testing area of Waterlox Coatings Corp. in Cleveland. Hawkins is vice president of the company and the fourth generation working in the family-owned business. He is a member of the Leadership Institute cohort. | GUS CHAN FOR CRAIN’S CLEVELAND BUSINESS

Retail experiences spice up shopping centers

BY STAN BULLARD

On the southern end of Crocker Park, at the street level below the American Greetings Corp. headquarters in Westlake, a potent sign of a fresh direction among mainstream shopping centers had its scheduled soft opening on Saturday, April 2.

It’s a surprise setting for a new Urban Air Adventure location. It has an electric go-kart track, a ropes course and a Sky Ride, a monorail-looking track that operates as a zipline. There also are trampolines and an obstacle course that suggests the “American Ninja Warrior” show. (In this setting, clear plastic balls replace the water element of the TV show.)

Welcome to another version of how retailing is responding to online shopping. Or, as Crocker Park developer Stark Enterprises of Cleveland likes to

put it, ”It’s all about the experience.”

Such is the case, too, for Ted Grambo, who owns the Westlake franchise of the Dallas-based chain and opened his first such venture in 2019 in Copley Township.

Grambo left corporate life and a 25-year career in bank branch operations with PNC Bank to pursue his own entrepreneurial dream, and to travel less. He said he was attracted to Urban Air because he doesn’t believe it may be outmoded by online ventures anytime soon.

“We liked this concept because we are an active family,” said Grambo, referring to his wife and two teenage children. “A lot of parents want to limit the screen time for their kids.

Urban Air has a business plan, and as a banker I liked that.”

See RETAIL on Page 16

See INTEL on Page 16

Partnerships key to plan for lakefront Private owners vital part of Cuyahoga County project

BY KIM PALMER

Ted Grambo and his team of staffers are getting ready to open an Urban Air Adventure location at Crocker Park in Westlake. | STAN BULLARD/CRAIN’S CLEVELAND BUSINESS

VOL. 43, NO. 13 l COPYRIGHT 2022 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

THE

NEWSPAPER

Intel and a $20 billion investment are coming to Ohio. Republican Gov. Mike DeWine forecast that two planned semiconductor chip factories will be “transformative” for the state. But the tech giant’s two planned facilities will be outside Columbus, hours from Cleveland.

Despite the distance, Northeast Ohio’s higher education leaders seem optimistic about the parts their institutions could play in helping to boost talent pipelines. They’re interested in earning part of the $50 million in grants and investments Intel has earmarked specifically for the state’s institutions over the next decade, too.

The company issued a request for proposals, or RFP, for that money. The funding is slated to help address both a shortage of skilled tech workers and semiconductor manufacturing challenges in part by funding a

LAND SCAPE

A CRAIN’S CLEVELAND PODCAST

A comprehensive plan to expand public lakefront access and connect the 30 miles of Lake Erie shoreline that spans Cuyahoga County inevitably depends on the approximately 3,800 privately owned parcels that comprise about 18.6 miles of that stretch.

At present, only 6.8 miles, or a little more than 22%, of the entire Cuyahoga County shoreline is accessible to the public. Most of what is accessible is in downtown Cleveland.

A Cuyahoga County report released in March found that increased public accessibility to the lakefront See LAKEFRONT on Page 17

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SPORTS BUSINESS The University of Akron men’s basketball team celebrates after winning the Mid-American Conference tournament. | PHOTOS BY DAVID DERMER/UNIVERSITY OF AKRON

‘IT’S REALLY A GOLDEN TICKET’

For mid-majors like Akron and Cleveland State, just making the NCAA tournament pays dividends

BY JOE SCALZO

Three days after the University of Akron nearly pulled off an upset of UCLA in the first round of the men’s NCAA tournament, Zips athletic director Charles Guthrie was still agonizing over what might have been.

“We had a seven-point lead with three minutes left …,” said Guthrie, who was off by just a bit. It was 49-42 with 5:28 left before the Bruins rallied for a 57-53 victory.

“When mid-majors get on the big stage, the exposure is incalculable,” he said. “It’s really a golden ticket.”

And this year, Saint Peter’s cashed in. The small New Jersey private school became the first No. 15 seed to advance to the Elite Eight, becoming the most inspirational story of a tournament that, alas, featured four blue bloods in the Final Four: Duke, Kansas, North Carolina and Villanova.

The Peacocks got a huge boost from their tournament run — more on that in a second — but for mid-majors like Akron and Cleve- Garrett land State, just making the tournament pays dividends for years to come.

“We’ve been able to use men’s basketball to tell the story of other things that are occurring at the institution because it’s so visible,” said Vikings athletic director Scott Garrett, whose team lost in the first round of the 2021 tournament. “The more success you have in men’s basketball, the more people are watching and paying attention. It has a trickle-out effect throughout the entire institution.”

How big is that effect? It depends on the school. But here are the answers to four basic questions: 1. How much is an NCAA berth worth financially?

In the simplest terms, Akron and

Cleveland State make the same amount whether they make the NCAA tournament or not. That’s because, like most leagues, the Mid-American Conference and the Horizon League split their NCAA money evenly.

The NCAA’s payout formula is a little complicated, but, basically, each tournament team earns a “distribution unit” for its conference. Those units are paid out over six years. Each unit will be worth about $340,000 in 2023 (the first year for this year’s tournament payments) and drop to $317,000 in 2028, according to Sportico. The number decreases because the canceled 2020 tournament cost the NCAA about $800 million.

Each of the 32 NCAA conferences in Division I receive an automatic berth worth one unit. Smaller leagues like the MAC and the Horizon League typically get just one bid, while the 36 at-large bids go to bigger leagues. The Big Ten, for instance, had nine teams in this year’s tournament. The 68 initial bids are part of what’s called the Equal Performance Fund.

The tournament also has a Basketball Performance Fund, which is based on tournament performance. For each win, teams earn a unit for their conference, with a maximum of six units for teams that advance to the Final Four.

The Big Ten and the ACC each had 18 units this year, which will pay about $36.4 million to each conference over the next six years, Sportico reported.

2. What are the other benefits?

The biggest is exposure. While the TV ratings for Akron’s game against UCLA weren’t that notable — it had a 0.97 rating, in part because it started at 9:56 p.m. on a Thursday night on TBS — the Zips did gain access to the second-biggest media market in the U.S. Plus, Akron got extra media atten-

“NCAA tournament success in men’s basketball is one of many factors in maintaining that trajectory.”

University of Akron men’s basketball coach John Groce poses in front of a sign showing the Zips punched their ticket to the NCAA tournament.

tion in the days leading up to the game, both locally and nationally.

“It’s not very often you’re reading about Akron in the Los Angeles Times,” Guthrie said.

Beyond that, schools see a boost in their social media engagement, their merchandise sales, their booster club donations and, if they make a longenough run, their college applications.

Some of that is temporary, but some isn’t, Garrett said.

“Our NCAA tournament appearance had an impact over the course of this year,” Garrett said. “Our season tickets were up substantially. Our donations were up significantly. We’ll probably have almost double the donations to our athletic program this year versus last year. We saw a lot of social media growth, especially over the couple weeks between last year’s Horizon League tournament championship and our first-round game against Houston.

“We were able to tell our story through Coach (Dennis Gates) and our team, both locally and nationally.

The exposure was a lot different than what you would see in a more normal season.”

3. What if you make a long run, like Saint Peter’s?

Good things happen, that’s what.

Saint Peter’s run earned $8.1 million for the MAAC (Metro Atlantic Athletic Conference), and athletic director Rachelle Paul told ESPN she’s trying get a bigger cut for the Peacocks. The school also sold $47,000 worth of on-campus merchandise, and another $100,000 in licensed product on Amazon, according to Bloomberg.

Donors also pledged almost $2.3 million between March 9 and March 26, a 278% increase from the year before, Bloomberg reported.

When No. 15 seed Florida Gulf Coast made the Sweet Sixteen in 2013, the school saw visits to its admissions page jump from 2,280 to 42,793, according to ESPN. When Butler lost to Duke in the 2010 national championship game, its applications spiked 41% year over year, according to Student Loan Hero.

“A lot of factors go into enrollment success, but I don’t think it can be discounted that we made an NCAA tournament appearance and we’re one of the more successful schools in the state in terms of maintaining and growing enrollment,” Garrett said.

4. Are there any downsides?

Yes. Specifically, people steal your coaches. Cleveland State just lost Gates to Missouri. Florida Gulf Coast’s coach, Andy Enfield, was scooped up by USC. Butler’s Brad Stevens stuck around for two more years, leading the Bulldogs to the 2011 national championship game, but was hired away by the Boston Celtics in 2013.

Still, Butler was able to jump from the Horizon League to the Atlantic 10 in 2012, then the Big East in 2013. The Horizon League had one team make this year’s tournament. The Atlantic 10 had two teams. The Big East had six and finished the tournament with 13 units worth a combined $26.3 million.

Tournament appearances also boost expectations. Kent State has one of the MAC’s best basketball programs, but the Golden Flashes haven’t been to the NCAA tournament since 2017 and the 2002 Elite Eight run was three coaches ago.

(They did finish second to Akron in this year’s MAC tournament.) Kent coach Rob Senderoff signed a contract extension in 2021, but it included a pay cut as Kent, like a lot of mid-majors, tries to keep costs under control.

Still, few things provide a return on investment like men’s basketball. The tournament proves it every year.

“There’s no question that our brand and the position of our men’s basketball program is different than it was three years ago when we hired Coach Gates,” Garrett said. “We’ve worked to be a model mid-major program, and that’s something we want to sustain.”

Joe Scalzo: joe.scalzo@crain.com (216) 771-5256, @JoeScalzo01

2 | CRAIN’S CLEVELAND BUSINESS | APRIL 4, 2022

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MANUFACTURING

Octet Scientific aims to work toward a sustainable battery solution

BY RACHEL ABBEY MCCAFFERTY

Onas Bolton knew he wanted to use his background in organic chemistry to make a difference.

He had been working at a large electroplating company, using chemicals to make bumpers shiny or place copper in the correct place on a circuit board, essentially controlling where and how the metals went. He was passionate about carbon neutrality and renewable energy, and he realized he could use his skill set to solve a problem in battery technology.

Batteries are going to become ever-more important as the world shifts away from a fuel-based economy, said Bolton, founder and CEO of Cleveland-based Octet Scientific Inc. Wind and solar power Bolton needs to be stored somewhere.

Octet Scientific is a developer of specialty chemicals for sustainable batteries, specifically zinc-based batteries. Zinc batteries are recyclable, sustainable and environmentally safe, as the material is benign, Bolton said. It’s readily available. The batteries can be water-based and non-flammable.

“So zinc has a lot going for it,” Bolton said.

It’s why the material has long been

used in everyday alkaline batteries.

But the problem has always been in recharging zinc batteries. And that’s the challenge Octet Scientific is working to address.

Much of the world today relies on just a few battery technologies, Bolton said. Older vehicles use lead-acid batteries, he said, and electric vehicles and small devices tend to use lithium-ion batteries.

“But we’re going to need a much more diverse amount of energy storage, and we believe that zinc-based batteries are a real answer for large-scale grid storage, basically any battery that doesn’t have to move,” Bolton said.

Bolton realized his chemical background could apply to the rechargeability problem with zinc batteries, because, as Bolton said, the issue is that zinc doesn’t always go where it’s supposed to during that process. Octet Scientific has developed chemicals to control the zinc.

Bolton applied for a National Science Foundation grant to develop these chemicals, which he received.

The company was incorporated in 2017, and work got underway the next year.

Bolton was already living in Northeast Ohio when he started Octet, but it makes sense for the physical prod-

uct startup to have roots in Cleveland, with its strong industrial history.

And the region’s business advocacy groups have been beneficial to Octet’s launch. Bolton said the first grant came “sooner than expected.”

He was a scientist who suddenly was also running a company. He reached out to groups including JumpStart Inc., BRITE Energy Innovators and MAGNET for help.

Octet is still pre-revenue and in the product development phase. It has two employees currently, and Bolton said he’s looking to grow that to four this year, plus interns.

The startup so far has received almost $600,000 in state and federal grants, and it also recently received its first private investment.

The investment from the Gale Family Office will help fund activities the grants can’t cover, Bolton said.

Grants are strictly defined, and the funds have to be used within specific parameters. The private funding can help Octet reach customers whose products are beyond the scope of the grants they’ve received, Bolton said.

It can also go toward expenses like sales and marketing or patent costs.

Bolton has been working with JumpStart’s mentoring program for about a year and a half, where he met Brian Gale.

Gale exited his business, labeling product maker I.D. Images, in the

summer of 2021 and formed the Gale Family Office. He declined to share the specific amount the office invested in Octet, but said it was a six-figure

ment will support Octet’s scale-up activities throughout 2022 as the developer works to become a manufacturer.

The company’s chemical products currently are being tested “BUT WE’RE GOING TO NEED A MUCH at battery manufacturers the U.S., Canada, Japan, MORE DIVERSE AMOUNT OF ENERGY in Europe and Australia.

Bolton said about 20 STORAGE, AND WE BELIEVE THAT companies worldwide ZINC-BASED BATTERIES ARE A REAL have tested Octet’s compounds so far, and the ANSWER FOR LARGE-SCALE GRID company is constantly STORAGE, BASICALLY ANY BATTERY making new compounds.

It can be tough for a THAT DOESN’T HAVE TO MOVE.” physical product startup — Onas Bolton, founder and CEO of Octet Scientific to attract investment dollars, Bolton said. The amount below half a million dollars. timeline for a return on investment After the investment, Gale stepped for battery products is much longer back from the JumpStart mentor role than that for something like software. for Octet, but joined the company’s While venture capital may not be the advisory board. best fit for a company like his, Bolton Gale said he was an early adopter said he’s seen more interest from of electric vehicles, and he’s a propo- chemical or manufacturing companent of battery technology. He said nies that understand how long it he thinks zinc batteries have “unlim- takes to develop a product. He said ited potential” as the world moves he wishes more chemical companies toward renewable energy. had strong venture programs, be“Octet is already a leading voice on cause they would better understand electrolyte development,” Gale said the process and the timeline. in a news release about the investBolton said he hopes the Gale inment. “With new funding sources, vestment is the lead in a round the they will be able to further their work company wants to run throughout with manufacturers to optimize bat- the year. teries, increase efficiency, extend operating lifetimes and boost capacity.” Rachel Abbey McCafferty: (216) The release noted that the invest- 771-5379, rmccafferty@crain.com

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New FDA authority could snuff out Akron manufacturer

BY DAN SHINGLER

Sometime this summer, Akron’s Fully Loaded Chew should find out from the federal government whether it can remain in business.

That’s when the company expects to hear from the Food and Drug Administration as to whether its products — snuff, or “chew,” that contains no tobacco and uses synthetic nicotine that’s not made from tobacco — have been approved by the federal government for sale. Or whether they’re now banned.

In the meantime, Fully Loaded has spent more than $100,000 getting its products tested by an independent lab, filed its application for FDA approval and begun waiting.

“We appreciate what they (the FDA) are doing. You want to know what people are doing with their products. But how they did it — it just dropped as part of another bill, and it’s a very aggressive timeline,” said Fully Loaded co-founder and CEO Sean Linton. “We’re talking six figures to get our products to the lab and get everything tested.”

The FDA had previously been regulating products with nicotine derived from tobacco, and some companies, particularly in the e-cigarette or vaping industry, switched to using synthetic nicotine. Last month, the FDA’s authority was expanded to cover synthetic nicotine, as well. That expansion was part of the federal omnibus spending bill signed by President Joe Biden on March 15.

Companies were given 60 days to file their applications with the FDA for product approval, and the agency then has 60 days to act on those applications. To Linton and others, that timeline seems short, given the amount of time it can take to conduct lab tests on a product, let alone any long-term testing to show that the products help smokers kick their cigarette habits, as the FDA would like.

“The 60-day period is not just unrealistic, it’s absurd. Companies were given 60 days to file highly scientific and complex evaluations,” said Tony Abboud, president of the Chicago-based regulatory consulting firm Strategic Government Solutions and executive director of the Vapor Tech-

nology Association, which helps companies comply with federal regulations.

Fully Loaded is caught in a regulatory issue meant to address some players in the e-cigarette industry that presumably switched to synthetic nicotine as a means of avoiding federal regulation, Linton said.

But evading regulations was never his intention, Linton said. He and a few friends who had used traditional oral tobacco products simply wanted to avoid the harmful chemicals found in tobacco and developed a tobacco-free chew using synthetic nicotine instead of nicotine made from tobacco, Linton said. They liked what they came up with so much that they decided to try to sell it, beginning in 2016, and since then have found a market of mostly like-minded customers who also would like to avoid tobacco, but not necessarily nicotine, he said.

Fully Loaded also makes some versions of its products that are nicotine-free, which some customers say they’ve used to get off nicotine entirely, Linton said.

“In 2018, 12% of our sales were zero percent nicotine,” he said. “This year, 34% of our sales were zero percent nicotine. So, I know it’s actually working.”

He has a lot riding on what the FDA decides. Linton estimated that he and his partners have about $3 million invested in Fully Loaded, nearly all of which came from profits they’ve reinvested in the business after starting it with their own money and some investments from friends and family.

“We were a bootstrap business, so it was just constantly taking any money the business made and reinvesting it,” Linton said. “But we’ve also got five or six years of our life invested in this.”

There also are some jobs at stake.

Linton said Fully Loaded employs 15 people at its headquarters and manufacturing facility on Cuyahoga Street, about a mile north of downtown Akron, where they formulate and mix products and prepare them for shipment to customers around the United States and in Canada.

The issue already is affecting Fully Loaded’s business. Linton said he selected only about 10 products, from a

list of more than 30, to submit for testing. Fully Loaded is ditching some popular products, such as peach-flavored chew, that Linton was warned would not get FDA approval and would likely cause his application to be rejected outright. He also had to avoid needlessly spending more than $10,000 per product on testing that would not prove fruitful with regulators, he said.

Linton said he hopes a 2018 patent Fully Loaded was awarded for its products will help show the FDA that it did not switch its product from tobacco-based to synthetic nicotine as a means of avoiding the agency’s regulations, but that it has been using synthetic nicotine all along.

For now, Fully Loaded has at least bought itself some time. Had it not filed its applications for FDA approval

by May 15, its products would have been automatically deemed illegal, Abboud said.

But the company’s fate is still not in the clear, and it faces a threat to its very existence, he contends.

“This (new law) is an existential threat to any products that contain synthetic nicotine,” Abboud said.

Linton’s a bit more optimistic.

He said he hopes that by giving the FDA all of the information it can, proving that its products do not contain the harmful or carcinogenic chemicals found in tobacco, and also showing that it has helped customers get off nicotine altogether, the FDA will grant it permission to keep selling them.

“As long as we don’t get a marketing denial order from the FDA, we’ll be OK,” Linton said.

There’s even a chance that the situation could help Fully Loaded’s business. The FDA’s enforcement actions not only are expected to remove a lot of e-cigarette products from the market, but they could remove some of Linton’s competition and keep other companies from introducing oral products with tobacco-free nicotine.

“Assuming we get through it, it could be a value-add for our company,” he said. “It’s another barrier of entry for other competitors.”

Dan Shingler: dshingler@crain.com, (216) 771-5290

4 | CRAIN’S CLEVELAND BUSINESS | APRIL 4, 2022

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LAW

For first time, co-presidents to lead McDonald Hopkins

BY JEREMY NOBILE

tions are in Columbus, Chicago and West Palm Beach, Florida.

For the first time in its 92-year The firm is operating under a hyhistory, Cleveland-based Mc- brid office model, with some peoDonald Hopkins will be led by ple regularly working remotely.

“We have five locations, but co-presidents in separate but we’re still one firm,” Stief said. neighboring markets.

It’s a dynamic that McDonald “We don’t really care where peoHopkins leaders say reinforces ple are; we just want the right the collaborative nature of the people to do the job. In this case, firm to the market while also en- it was someone in Detroit and abling these new leaders to con- someone in Cleveland.”

“Having the co-presidents, and tinue work on their respective the Jims and I being practices because of the able to work together, way they’ll be sharing really gives us an opmanagerial responsibiliportunity to be 100% ties. committed to managThe newly elected ing growth and operaco-presidents are James tions of the firm while Stief, who is based in allowing us to stay inCleveland, and James volved in our practices Giszczak, who works out that are very important of the firm’s Detroit ofto us,” Riley added. fice.

Stief In terms of daily opTogether, they will sucerations, Stief said he ceed Shawn Riley as he and Giszczak will be in completes his second regular contact, but three-year term as presicertain duties will be dent at the end of Sepdivided to avoid duplitember. cation. If an attorney or Stief chairs the firm’s client “speaks with one business law department. of us, they can assume Giszczak serves as chair they’ve talked to both of the firm’s litigation deof us.” partment and co-chair of Giszczak “This will leave us its data privacy and cymore time to focus on bersecurity practice client engagement and group. Both are longtime satisfaction, as well as members of the McDonattorney needs and ald Hopkins executive ways to help them grow committee and board of further,” Stief said. “I directors. think it is a better sys“This was a very tem.” thoughtful approach,” As far as whether the Giszczak said. “We’ve co-presidents dynamic worked collaboratively Riley will be the dynamic for over the last several years on many issues that arose in the the firm in perpetuity, that’s not firm and, as we continue to work necessarily a given.

“This is going to work because together, one thing that struck us is that this could be a great model of the individuals involved,” Riley for us as a firm that works so col- said. “I’m not sure we could do laboratively. This takes that up a this with just any two partners at the firm.” notch to the next level.”

It’s no secret that the legal serThe timing for this move feels right, he said, as the firm looks to vices profession performs poorly a world where the pandemic is when it comes to having diversity in the workforce, especially at deless of a factor.

“We thought this was a unique cision-making levels.

Firm leaders acknowledge this time, coming out of COVID, with a tremendous opportunity to but do not think that its two new re-engage with one another on leaders, who both are white, diminishes its fo“WE WILL DO A COMPLETE REBUILD OF cus on matters diversity, eqOUR SPACE. WE ARE LOOKING FOR WAYS of uity and incluTO BRING PEOPLE BACK TO THE OFFICE sion.

Riley notes AND THE WAY TO DO THAT IS TO CREATE the firm adopted a strategic A REASON FOR THEM TO BE HERE.” plan in 2019 — Shawn Riley, outgoing president of McDonald Hopkins that includes four key pillars. more of a personal, face-to-face One of those representing people level and collaborate with all and culture includes a focus on folks in all practice areas,” DEI. “A goal there is to, as a firm, reGiszczak said.

Extending the president’s du- flect the diversity of the commuties beyond Cleveland also is nities in which we practice and meant to de-emphasize an offi- become a firm that is truly inclusive,” Riley said. “We’ve made cial market headquarters.

McDonald Hopkins has ap- some strides, though we are noproximately 152 firmwide attor- where near where we want to be. neys today, with 80 in Cleveland But I think if you were to speak to and 24 in Detroit. Its other loca- anyone at any level of the firm,

there is a clear commitment at McDonald Hopkins to be as inclusive as possible and to focus on the hiring and retention of diverse lawyers and employees.”

In terms of priorities firm leaders will be looking at, an obvious one is organic, profitable growth.

A key to that is adding attorneys. And for a firm active in the lateral hiring market, McDonald Hopkins hopes the co-presidents model will convey a collaborative culture that could help draw in talent.

“We are a destination firm,” Giszczak said. “We want it to ring loud and clear to the market that both clients and attorneys want to be at McDonald Hopkins, and when they do come, they are not going to want to leave because we have a phenomenal culture and great business model.”

New practice areas could be in the offing, though firm leaders were reluctant to show their full hand on what might be in store on that front.

In general terms, some practices they’re looking at developing could be in the areas of technology and cryptocurrencies. Those would be in addition to growing some of its more nascent practices, such as one in the area of estates and trusts, which McDonald Hopkins is committed to growing.

As far as office space, although the firm is embracing a hybrid work model, it’s not planning any major downsizing the way some other firms have sought to trim costs in a post-COVID world that saw a shift to virtual work.

Riley notes the firm is in the midst of a redesign of its Cleveland office at the Fifth Third Center. That will include soundproof “Zoom rooms” for confidential meetings, more collaborative work areas and other high-end tech upgrades.

“We will do a complete rebuild of our space,” Riley said. “We are looking for ways to bring people back to the office, and the way to do that is to create a reason for them to be here.”

In Detroit, Giszczak said the firm has been filling up its office but may need more space in the future.

As far as compensation goes, the firm did not share what its salaries look like today but asserts they’re keeping up with the rising level of pay throughout the industry.

“It is an intensely fierce legal market right now with salaries going up dramatically, and we are keeping pace,” Stief said.

“Dollars are important when it comes to the talent war,” Giszczak said. “But being part of an entrepreneurial firm is also very important to people because they will experience opportunities they might not normally experience.”

Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile

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4/1/2022 1:16:04 PM

REAL ESTATE

Take a peek inside the region’s senior housing disruptor

BY STAN BULLARD

Ask Pat Finley, the founder and chairman of Vitalia Active Living, and Mario Sinicariello, its president, why they launched the fast-expanding chain of age-targeted, active living communities, and you will hear an unexpected answer.

“We felt something was missing,” Finley said, referring to the way housing for senior citizens generally has been positioned. “Retirement is another part of life. What people are after is a carefree lifestyle. We don’t use the terms retirement community or senior housing.”

Instead, the approach is reflected in the name for the communities, as “vitalia” means “full of life,” Sinicariello said. Elements of the philosophy imbue the venture, which includes a focus on light-filled designs and amenity-rich locations, each with a theater, pool and exercise room.

There is also a chef-prepared menu available daily from 7 a.m. to 7 p.m.

However, combine those elements with others in a culture of service, and the two saw a chance of becoming a disruptor in the space.

Whatever the underpinning, the results are profound.

Starting with Vitalia’s first community four years ago in Strongsville, the group has grown to 10 locations, with eight open and two under construction. More are in development. Their locations already form a ring around the Cleveland suburbs and extend as far south as Copley, the Akron suburb. There are almost 1,700 units, a portfolio valued at about $500 million.

To get this far, Vitalia has raised through six funds a total of $146 million in equity from a combination of local and international investors.

They calculate the communities have a total economic impact of about $400 million annually.

Finley and Sinicariello invested heavily in the venture.

“We made our interest align with those of our investors,” Finley said. In Finley’s case, he sold most of his portfolio of apartment and office buildings and hotels developed in a 38-year real estate development career.

But that wasn’t just the money.

“This is such an entrepreneurial challenge, it had to be the point of

Standing in front of Vitalia’s Solon location are company principals Mario Sinicariello and Pat Finley. In four years, the company has opened eight locations in Northeast Ohio and two more are under construction. | CONTRIBUTED

ment side. Assembling sites from 5 to 15 acres requires acquiring multiple parcels, often obtaining a rezoning from the municipality, frequently requiring a referendum campaign.

Each location is “WHEN WE INTERVIEWED ARCHITECTS, roughly a two-year endeavor.

WE SOUGHT THOSE THAT WOULD ADD However, what disELEMENTS OF A HOME, BECAUSE THAT tinguishes Vitalia, the two said, is its focus IS WHAT WE ARE BUILDING. WE on demographics.

Th e fi rm employs WANTED NOTHING INSTITUTIONAL.” three dedicated data — Pat Finley, the founder and chairman analysts devoted to of Vitalia Active Living vetting prospective sites.

“Often, I will find a site and (the sole focus,” Finley said.

Finley and Sinicariello have known analysts) will tell me it won’t work by each other for decades. Sinicariello the numbers,” Finley said. “We have a had a background in operating nurs- culture where the analysts can tell ing homes and senior housing facili- me where I’m wrong. We can’t make ties in Connecticut, a path he pur- a $50 million mistake,” which refers sued when a banking client asked to the estimated investment in each him to operate his company. Origi- community.

However, Sinicariello said it’s more nally, when Finley was getting started as a developer, Sinicariello was a loan than simple statistics.

“We put boots on the ground in officer at the former National City each location,” Sinicariello said. “For Bank.

Their backgrounds partially ex- example, the demographics may plain how Vitalia has gotten so far, so look right. But a river may bisect the fast. The major obstacle for such a market area, and prospective resibusiness is the real estate develop- dents will not view it as their area.”

Vitalia locations

Starting with Vitalia’s first community four years ago in Strongsville, the group has grown to 10 locations, with eight open and two under construction. There are almost 1,700 units, a portfolio valued at about $500 million.

Current location Under construction

Avon Lake

Elyria

Cleveland

East Cleveland

Parma

Stow Cuyahoga Falls

Kent

SOURCE: VITALIA ACTIVE LIVING WEBSITE AND CRAIN’S CLEVELAND BUSINESS RESEARCH

Even so, he said, most residents come from within a five-mile radius of their chosen Vitalia location. That also reflects the preference of people over 50 to stay close to home, where they have friends and know the area.

Design and construction also reflect the philosophy.

“When we interviewed architects, we sought those that would add elements of a home, because that is what we are building. We wanted

nothing institutional,” Finley said.

“Our goal is to make each location qualify as a dream home.”

Vitalia also strives to diversify its vendors. For example, one architecture firm may design three communities, but the company also has other architecture firms in different communities. Vitalia has also used four different construction firms for its portfolio so far.

“We could not grow at the pace we have if we self-performed on construction,” Finley said. “There are thousands of details in construction that need to be monitored. We’re better off having contractors who have their own group of subcontractors on each project.”

However, he added, “We monitor everything, and closely.” To that end, its Solon “home office,” as the two prefer to refer to their headquarters, employs about 40 people, though most are in the field. Also outsourced is the day-to-day operation of the properties, all through Arrowhead Senior Living, a private company based in St. Charles, Missouri.

Residents of Vitalia communities, which offer independent and assisted living, land there for a variety of reasons.

Bill and Susan Turner, for example, moved into the North Olmsted Vitalia after COVID-19 and the lockdown put an end to their plan to spend their retirement years cruising.

“It’s very similar to a cruise ship,” Susan Turner said in an interview.

“With all the natural light, if feels similar, as well as the amenities.”

Vitalia also attracted them because it does not require a large down payment for entry, as is typical of other communities they examined. Bill Turner said the meal plan was also attractive, for the three meals daily are the exception and not the rule among senior housing properties.

A resident of the Rockside Vitalia in Seven Hills, Teresa Saunders learned about Vitalia in an oblique way. She was looking at buying a townhouse when she asked the seller where he was moving. It turned out he was heading to senior living. That led her to Vitalia, where the retired nurse said, “If I’m bored, it’s my own fault.”

Designs of the units played a part for Pat Kline, who lives at the Montrose Vitalia, technically in Copley.

She said she and her husband wanted a two-bedroom, two-bath suite, which Vitalia offered. She also noted she liked the transportation options, for Vitalia offers free transportation to doctor visits and, for a charge, other locations.

Ralph McGreevy, chief operating officer of the Northern Ohio Apartment Association trade group, said he is not surprised by the ability of Vitalia to expand quickly, as its units lease up quickly.

“It’s a case of success breeds success,” McGreevy said.

Vitalia also isn’t done growing. In the future, Finley said, it plans to pursue locations in Detroit, Toledo and western New York state.

Because of the demographics of aging baby boomers and the age of many in the Great Lakes states, Finley said Vitalia considers the Cleveland-Akron area, as well as others, “boom towns.”

Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

6 | CRAIN’S CLEVELAND BUSINESS | APRIL 4, 2022

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MANUFACTURING

Manufacturing ‘lighthouses’ aim to speed up Industry 4.0 adoption

BY JUDY STRINGER

Ethan Karp is among a handful of leaders sounding the alarm on Ohio’s sluggish embrace of smart manufacturing.

Karp, president and CEO of the Cleveland-based Manufacturing Advocacy and Growth Network (MAGNET), estimates that less than 10% of Ohio manufacturers are looking at Industry 4.0 technologies — advances like IoT (Internet of Things), AI and high-powered analytic systems that can drive real-time data exchange and decision making.

Many of these technologies are “affordable and available today,” according to Karp, and hold the potential to make factories across the state more efficient, effective and competitive, yet “we are seeing single-digit adoption rates.”

He hopes an expanding roster of advanced manufacturing demonstration sites in Northeast Ohio will hasten this region’s push into 4.0.

Today, eight Northeast Ohio organizations are actively opening their doors to give others a firsthand glimpse into manufacturing transformations, big and small. That number is expected to grow to 40 by the end of 2022.

“The number itself, however, isn’t nearly as important as the fact that these sites are geographically spread out across the region,” Karp said. “We have folks in Cuyahoga County and Mahoning County, for example, and Columbiana County and hopefully something soon in Tuscarawas County. The point is that we don’t want you to have to drive two hours to see it.”

The Northeast Ohio demonstration sites were highlighted in the Cleveland Innovation Project’s annual report, released March 8. The CIP referred to these sites as smart manufacturing “lighthouses,” borrowing the moniker from the World Economic Forum’s Global Lighthouse Network, a collection of now 90 manufacturers across the world said to be “illuminating the opportunities available to organizations that scale digital operations.”

The global network includes Procter & Gamble’s Lima plant, which reported a 10-fold speed-to-market increase in 2020 and a 5% year-over-year productivity jump after deploying advanced robotics, automation, 3D printing and digital manufacturing twin technology at the site. The Cincinnati-based consumer products giant also said the plant became two times better than competitors at avoiding out-ofstock events as a result of the investments.

Compared to these larger projects, Karp said the majority of the CIP’s advanced manufacturing sites might be better described as “mini lighthouses.”

One company, for example, attached a sensor that enables it to count a specific part coming off an older manufacturing line. Before the retrofit, the manufacturer was unable to accurately forecast production or even determine when it was best to start and stop the equipment.

“So, having that data-monitoring device improves their operational efficiency but also it becomes a quality measure, too, because now they knew exactly how many are in a batch,” he said. “That’s a very simple example.

Doesn’t sound so sexy, but I can tell you it makes a really big difference.

And guess what? They didn’t have to go out and buy the newest whiz-bang machine to do that.”

Shifting through “salespeople promises,” Karp explained, is one of the biggest challenges small and medium-sized manufacturers face in making technology upgrades.

“Seeing it from one of their peer manufacturers, and hearing what they did and Karp why they did it and also how difficult or easy it was, is so much more impactful to inspire these company leaders to do the thing that we need the whole region to do in terms of taking on new technologies,” he said.

Higher end There is one site on Northeast Ohio’s lighthouse list that Karp counts as a “high-end” example — the EY-Nottingham Spirk Innovation Hub on Cleveland’s eastern border.

Opened in October, the 60,000-square-foot facility is a partnership between the global professional services firm Ernst & Young and Cleveland-based product designer Nottingham Spirk.

“They are showing all the latest

and greatest technologies and tools that can be integrated into manufacturing facilities,” he said.

The hub’s services are directed primarily to Fortune 500-type companies, but Karp anticipates smaller manufacturers will be invited to demonstrations from time to time and will be able to extrapolate how their relatively smaller projects are worthwhile.

And MAGNET’s own Midtown buildout is one of the dozens of Northeast Ohio smart manufacturing lighthouses coming online this year.

According to Karp, the organization’s

new headquarters will include a 20,000-square-foot showcase space for technologies like collaborative robots and 3D printing and prototyping.

“That’s not as exciting as going into a real, functioning manufacturer, but we’re trying to make this a constellation of places that people can visit and can inspire them to either work with someone like us or just do it themselves and really up their game and technology,” he said.

Contact Judy Stringer: clbfreelancer@crain.com

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APRIL 4, 2022 | CRAIN’S CLEVELAND BUSINESS | 7

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PERSONAL VIEW

Does Cleveland have a ruling class?

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BY ROLDO BARTIMOLE

EDITORIAL

Welcome back B

aseball’s finally starting, this Thursday, April 7, which is about a week late due to an offseason of labor unrest.

We’re glad to have it back, and, of course, to get our first look at the Cleveland Guardians. Perhaps the start of games that matter will wipe away some of the bad feeling that has overwhelmed the sport for the past few months.

Owners locked out the players in early December after their existing labor agreement expired. The late resolution of the lockout, on March 10, led to the delayed start of the regular season, which is why the Guardians won’t make their Progressive Field debut until Friday, April 15 — a Good Friday home opener against the San Francisco Giants that still isn’t sold out.

The sport will need more ways to reverse a decline in interest. Bloomberg noted that attendance fell to 68.5 million in 2019 (pre-pandemic), the lowest since at least 2006. TV viewership rebounded last year, with the World Series audience on Fox up 20% to almost 12 million viewers, though that was well below the recent peak of 23.4 million in 2016.

In Cleveland, the team has some work to do to win over the fans.

The name change doesn’t bother us — it’s all corporate marketing in response to changing times, and we’re not going to get too worked up about that — but there still are hard feelings among some members of the fan base. More challenging to fans’ patience is the team’s strict adherence to a tight payroll that’s among the lowest in the league. The financial constraints of small-market teams are real, but as Forbes found in its recent ranking of baseball’s most valuable teams, the Guardians, at No. 24 in the league, have an estimated value of $1.3 billion, up 12% from a year ago.

In that context, it’s frustrating to see, for instance, The Athletic give the team a grade of “D” for its uninspiring offseason moves. “Cleveland is trending in the wrong direction as the rest of the division gets better,” the website wrote. That’s not a recipe to gin up excitement for a team that already is resorting to gimmicks to get people into the ballpark: buy Opening Day tickets and get free Upper Reserved tickets to an April or May home game of your choice. One potentially good sign: The

Guardians’ front office and All-Star third baseman Jose Ramirez have exchanged proposals on a potential contract extension. It would be nice for a change to keep a star around long-term.

Expectations for the year are modest, but the Guardians, like the pre-injury Cavs, could surprise. It’s good to have baseball again, as a welcome distraction from the state of the world.

Jersey city T

alk about a barrier. $3.5 million. That’s now the estimated cost of the project to remove the “temporary” concrete Jersey barriers that ruined the aesthetics of and soured enthusiasm for the Public Square renovation.

Cleveland City Council is considering legislation to contribute $1.5 million to the project, and the Greater Cleveland Regional Transit Authority board of trustees and the Group Plan Commission, the nonprofit that manages Public Square, last week said they will ask RTA to kick in another $500,000.

Sanaa Julien, CEO of the Group Plan Commission, said the organization is “actively fundraising with proposals in market for the balance of $1.5 million.” She added, “We know that we are going to come in under that number, but we are hopeful that we can bring in the entire amount with whatever balance going into our operations and maintenance budget for the bollards and other maintenance uses in the square.”

The Jersey barriers and planters have been at Public Square since 2017 to address safety and security concerns that were never well explained and probably were overblown. It’s well past time for them to go, and we hope some deep-pocketed donors step up to help speed the pace of their removal.

There’s no way, unfortunately, to get a do-over on the whole thing. There are all sorts of ways that $3.5 million could have been spent to enhance pedestrian safety throughout the city. We believe the new administration at City Hall understands that and will set future spending priorities accordingly.

Executive Editor: Elizabeth McIntyre (emcintyre@crain.com) Managing Editor: Scott Suttell (ssuttell@crain.com) Contact Crain’s: 216-522-1383 Read Crain’s online: crainscleveland.com

With a new mayor of Cleveland and a new county executive to be elected this year, it is time the people of this community determine how decisions are being made, by whom and for whom. And whether they’ll be made in the traditional way they have been made.

In a 1961 classic study of “Who Governs? Democracy and Power in an American City,” Robert Dahl studied Bartimole wrote New Haven, Connecticut. He deter- and published a mined that power in the city was dif- political fuse. In other words, there was no pow- newsletter, Point er elite pulling the strings of governing. of View, from Dahl, who died in 2014, was a Yale Uni- 1968 to 2000. It versity political science professor. is available on In a major opposing view, based on Cleveland State the study of the same city, G. William University's Domhoff wrote, “Contrary to Dahl’s be- Memory Project lief, there is an active and organized website. business community in New Haven, and Yale University is a very important part of it.” It ruled.

Domhoff, distinguished professor emeritus at the University of California, Santa Cruz, has just published an 8th edition of his critical study “Who Rules America?” He grew up in Rocky River, was a three-sport athlete in high school, and won a contest to be a bat boy for the Cleveland baseball team.

All this leads to this proposition: “Who Rules Cleveland?”

There is no academic study of this city’s power structure or lack of it, or any formal determination of how power works here.

It is a crucial question because it would reflect how the city’s resources are used, by whom, and for what purposes.

Well, we really don’t need a study, because the city’s power establishment laid out clearly that it rules! And it proved that by its actions. And its proclamation.

Cleveland business leaders in 1989 bragged to Fortune magazine that they had coalesced boldly, seizing control of the city of Cleveland’s government.

The coup of city government took place a decade before.

The mission was to remove then-Mayor Dennis Kucinich from office, electing a mayor of the businessmen’s choice.

That was George Voinovich. It was 1980.

The effort by Cleveland’s business leaders, according to their claims to Fortune magazine, was that the business leaders “organized the troops and devised a strategy, setting in motion a benign conspiracy of executives and entrepreneurs that still operates.”

From the article: “The impressive feat of organizing that cabal and persuading Cleveland’s most senior businessmen to take charge of the grittiest aspects of civic life was the key to the town’s turnabout. Cleveland bosses are arguably more public spirited than most, but they had hitherto focused that spirit on the especially successful United Way, not on breadand-butter matters.”

What Fortune had described was an organized coup of the city’s government.

There’s no lesser description of “Who Governs?” But it was really nothing new to anyone paying attention.

Two decades before, Jones Day managing partner Jack Reavis explained to the U.S. Civil Rights Commission meeting here how things worked: “I secured a pledge from the editors of the newspapers (The Plain Dealer and the Cleveland Press) that they would give us no publicity except as we asked it because everybody in the group thought we could work better privately.” The group was the Businessmen’s Interracial Committee, formed to deal with the racial turmoil of the 1960s.

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing ClevEdit@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes.

See CLEVELAND, on Page 9

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8 | CRAIN’S CLEVELAND BUSINESS | APRIL 4, 2022

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OPINION

110,000 SF INDUSTRIAL SUMMIT COUNTY 6270 Van Buren Road Clinton, OH 44216

PERSONAL VIEW

Fair property valuation is a catalyst of a thriving downtown

BY MICHAEL DEEMER

In early 2020, downtown Cleveland enjoyed substantial momentum. The pandemic, however, undermined the very density upon which downtowns thrive. Because of downtown Cleveland’s high concentration of jobs accessible by multiple transportation modes, recapturing this momentum is essential to securing an equitable and environmentally sustainable recovery.

Removing barriers to accelerating this recovery is critical.

Ohio’s broken system for determining property values is one of those barriers. The current process traps taxpayers in a vicious cycle of costly legal proceedings.

The result is an unpredictable tax environment that siphons resources away from schools and chills job-creating investment in the city.

Property owners are familiar with how counties determine property values. Every three years, county governments appraise properties to set tax values. If you as a homeowner disagree, you may appeal and provide evidence as to why you believe your local government got it wrong. This process allows owners to guard against their government incorrectly overvaluing their property.

Many homeowners do not realize that other individuals and government agencies can and do file their own appeals challenging the county’s decision at any time in between the county’s triennial appraisals. They do not have to provide their own appraisals; in fact, they don’t need to provide much evidence at all. If they lose an appeal, they can simply file another one with the Ohio Board of Tax Appeals the next day. This vicious cycle, most often pursued by overzealous attorneys representing school districts, selectively targets taxpayers. Ohio is one of the very few states that allows this haphazard process.

The Ohio Senate recently passed House Bill 126, which would reform this out-of-control process. It would allow taxpayers to file complaints challenging their own property valuations, while prohibiting third parties from filing complaints. It also protects school district interests by allowing them to file a counter-complaint if a taxpayer seeks a decrease in value.

The bill does not diminish the revenue a school district can collect under current or future tax levies. The Ohio House of Representatives passed a different ver-

CLEVELAND

From Page 8

Indeed, Carl Stokes, the city’s first Black mayor, didn’t call his book “Promises of Power” without reason.

He tells a story within of his attempt to get a piece of urban renewal land developed. It was a test of who rules.

Stokes made a demand that a developer who held an option on land in the city’s Erieview urban renewal area move to develop or lose the option.

He got feedback quickly.

“First, a prominent bank president came to see me,” Stokes wrote. “He explained how much it had meant to Cleveland to get (John) Galbreath (the developer) to come in and put up the first Erieview tower, and how if we moved to revoke the city’s agreement with Galbreath there would undoubtedly be a lengthy and costly court suit. ... He was telling me not to move against Galbreath.”

Stokes went to the editors of the then two Cleveland newspapers, wanting their support. They, Stokes wrote, said “that I would not have their support.”

“Finally,” Stokes wrote, “James Davis, a prominent Cleveland lawyer (at Squire Sanders) whose firm monopolizes bond counseling for nearly every city in Ohio, came over to suggest that it really wouldn’t be wise to move against Galbreath at that time, and he suggested we sit down with Galbreath and try to work things out.”

I believe Stokes knew these were not suggestions but

sion of this bill. A conference committee has been appointed to reconcile the differences.

While a compromise like the Ohio Senate’s version is desirable, there are other ways to protect taxpayers.

Late last year, I testified before the Ohio Senate Ways and Means Committee in support of a model used in Illinois and Texas. It would allow a Deemer is complainant or countercompresident and plainant to provide the board of reCEO of vision with a reasonable number of Downtown comparable properties in the counCleveland ty. The board of revision would deAlliance. termine whether the county’s valuation is less than, more than, or equal to the average valuation of comparable properties in the county. The average of comparable properties would result in the highest assessment that the county could impose.

Using this approach places a ceiling on the assessment but does not limit schools or taxpayers from protecting their interests. Property would be taxed like its neighboring comparable properties. Like the Ohio Senate’s approach, this would protect the interests of all stakeholders and provide Ohio taxpayers with the uniformity and equity they deserve.

High-quality public schools and a level playing field for investment are both essential to the downtown neighborhood our community is building. That is why Downtown Cleveland Alliance advocates for the Cleveland Metropolitan School District and initiatives ranging from Say Yes to Education, geared to college-readiness, to PACE, targeted toward connecting students with job opportunities.

We recognize school funding remains too dependent on local property taxes. DCA, accordingly, supports fully implementing the Ohio Fair Funding Plan, enacted by the Ohio legislature with bipartisan support in 2020.

This plan is already reducing reliance on local property taxes to fund public education.

We must work as a community to advance these initiatives and reforms. At the same time, taxpayers in Ohio need relief from a property valuation process that has run amok. I urge our Statehouse representatives to take this opportunity to deliver the much-needed relief to Ohio taxpayers.

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commands.

It was clear how the business/corporate/legal/banking establishment decided “Who Rules Cleveland.” Not the mayor.

It wasn’t the guy the voters elected, as Stokes clearly said of the promise of power and the lack of delivery.

The result of who governs in Cleveland clearly can be seen by the great success the coup of the Kucinich administration has had for the power structure.

Its agenda has been the public agenda for four decades since the coup.

The priority list: three major sports facilities constructed and enhanced, by regressive taxes, weighing most heavily as you go down the income scale; generous tax abatements with other financial incentives heavily favored by developers and banks; public funding of such desires as the Rock Hall, the waterfront rail line, Playhouse Square and other elite desires. Typically without public votes.

And continued population loss and high rates of poverty, with little — so little — opposition.

Presently, the costly effort will be to build a very costly land mass from the historic Mall area of government buildings along Lakeside Avenue and extend it over rail lines and a major highway (to be rerouted) to open the lakefront to profitable development disguised as a project to let people know we have a lake.

Yes, there is a ruling class that governs. And in Cleveland it has been so successful that it has damaged the city and its people.

APRIL 4, 2022 | CRAIN’S CLEVELAND BUSINESS | 9

NARROWING THE GAP BETWEEN IT, OT

MANUFACTURING

As the pandemic raged, businesses were forced to narrow the “air gap” that divided how their computer systems and industrial machines connected to one another.

PAGE 13

Lachelle Bender, owner of GIMMEAHAND Academy of Nails, is a member of the Leadership Institute cohort. | GUS CHAN FOR CRAIN’S CLEVELAND BUSINESS

Developing the next generation

Manufacturing Works wants to help people buy and run businesses

BY RACHEL ABBEY MCCAFFERTY

Lachelle Bender is the owner and founder of GIMMEAHAND Inc. in Cleveland.

The nail school offers a number of private-label products through the company’s cosmetics division, but Bender now is exploring the idea of manufacturing them herself. She’s been an entrepreneur for years and has experience running her own business. The problem? She doesn’t have experience in manufacturing.

Enter the Manufacturing Works Leadership Institute.

Manufacturing Works wanted to help “establish a marketplace for buying and selling small, midsize manufacturers in Northeast Ohio,”

said Ken Patsey, president and executive director.

Patsey joined Manufacturing Works in 2019. The Cleveland-based organization, which used to be known as Wire-Net, has been supporting the manufacturing community in Northeast Ohio for decades, and its leaders have seen a lot of small companies close over the Patsey Schultz years, Patsey said. Small businesses often struggle when it’s time for a planning and sales, and the Leadersale if there’s not a family buyer, he ship Institute, which aims to prepare said, and the likelihood of a family a diverse group of potential future buyer diminishes with each genera- business owners.

Diversity “makes for a stronger tion. Manufacturing Works’ new business, a stronger industry, a programs aim to address that issue.

That includes the Growth and stronger community,” Patsey said.

But manufacturing, particularly Transition program, which helps business owners with succession locally, is dominated by white men,

he noted. Preparing a more diverse group of qualified potential owners could have a big impact. Manufacturing Works aims to have at least half of each cohort in the Leadership Institute made up of women and/or people of color.

“Our overall mission here is to develop and diversify the next generation of manufacturing owners and leaders,” said Brianna Schultz, vice president of learning and development at Manufacturing Works, who oversees the institute.

The Leadership Institute is designed for a small cohort, with opportunities for self-reflection and for learning from one another built in.

“OUR OVERALL MISSION HERE IS TO DEVELOP AND DIVERSIFY THE NEXT GENERATION OF MANUFACTURING OWNERS AND LEADERS.” — Brianna Schultz, vice president of learning and development at Manufacturing Works

See GENERATION on Page 12

10 | CRAIN’S CLEVELAND BUSINESS | APRIL 4, 2022

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3/31/2022 12:29:54 PM

She means business.

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“I’m also proud that Bank of America walks the walk when it comes to hiring, supporting and promoting women within our walls.

Our board of directors is 50% diverse, including 6 female directors. Our workforce is half women, just like Cleveland. And our management team is more than half diverse, including 7 female leaders.”

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FOCUS | MANUFACTURING

GENERATION

From Page 10

Stressing the ability to lead The first cohort, of which Bender is part, is made up of eight individuals with a variety of backgrounds. Schultz said half are already business owners, which she had not anticipated when the program launched.

“So all of these different experiences and perspectives really provides a great kind of board of advisers for each other,” Schultz said.

Patsey said both the Leadership Institute and the Growth and Transition program are working with people during a big moment of change in their lives, which makes the cohort model more important. It builds people’s confidence to tackle such a transition with others going through the same thing, he said.

The cohort members in both programs also have the chance to learn from subject-matter experts, from inClough surance professionals to lawyers.

Manufacturing Works reached out to current business owners in its network for help defining the topic areas in the Leadership Institute’s curriculum. Schultz said the top two areas of focus people emphasized were an understanding of finances and the ability to lead.

“Those were the two things that every owner said,” she noted.

The institute holds weekly meetings for the first 17 weeks of the year-

Conor Hawkins, vice president of Waterlox Coatings Corp., tests some of the company’s products in its Cleveland manufacturing facility. Hawkins is the fourth generation working in the family-owned business and is a member of the Leadership Institute cohort. | GUS CHAN FOR CRAIN’S CLEVELAND BUSINESS

long program, with monthly meetings after that. The first cohort began in late December. The next cohort will likely begin in late April, after the first one completes its weekly meetings. Schultz said the goal is to launch a cohort a quarter.

Patsey said the Leadership Institute is currently supported by the Cleveland Foundation, and Schultz said the organization is also looking for sponsorships. The institute costs the participant $2,000, Schultz said,

but Manufacturing Works offers full and partial scholarships.

Though the institute has a curriculum in place, it could evolve. Since each cohort will be different, Schultz said, the program will need to adapt to meet their needs. Ron Clough, who oversees the Growth and Transition program for existing business owners, has seen his programming change as the program matured.

Clough, vice president of manufacturing services for Manufacturing

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Works, said both programs are trying to help “level the playing field.” Most participants are only going to buy or sell a company once; they want people to feel prepared as they make these big decisions.

Schultz said Manufacturing Works has drawn on its own network to build its first cohort of the Leadership Institute, but it also worked with organizations like the Urban League of Greater Cleveland on recruitment.

And connecting with experts, and with people who have bought and sold companies, has been particularly helpful.

“I’ve seen the terms. I’ve heard the things,” Hawkins said. “But I’ve never really talked to an expert about any of it.”

Fellow cohort member Bender has also found the program valuable.

Bender originally set out to be an entrepreneur when her children were young; she wanted to be able to set her own schedule.

An ‘eye-opening’ GIMMEAHAND was born in 2005 experience because she wanted to help other One member of the cohort, Conor women do the same. As she looks to Hawkins, is part of the fourth genera- expand her business, the institute tion at family-owned Waterlox Coat- has helped.

“I’ve been a manicurist for 25 ings Corp. in Cleveland.

Waterlox, which has been in busi- years,” Bender said. “And now it’s ness for more than 100 years, has sev- time for me to grow again. And in oren employees. It’s made a variety of der for me to grow, I have to put myproducts over the years, but today self into situations where I can glean largely focuses on wood finishes. experience from different people Hawkins, the company’s vice presi- with different, diverse backgrounds.” dent, said he grew up in the business, That’s what drew her to the cohort, she said. Women and other marginalized “AND IN ORDER FOR ME TO GROW, I people in business ofHAVE TO PUT MYSELF INTO SITUATIONS ten miss out on resources and opportuWHERE I CAN GLEAN EXPERIENCE nities and chances to FROM DIFFERENT PEOPLE WITH network. the institute DIFFERENT, DIVERSE BACKGROUNDS.” hasAnd helped her learn — Lachelle Bender, owner and about a variety of topfounder of GIMMEAHAND Inc. ics, from commercial lending to raising officially joining it in about 2014. He funds to succession plans, that Bendbecame part owner at the start of er said align with her goals for her 2018, after his father’s retirement. company’s future. She knows she Though Hawkins, a chemical engi- wants to grow her business, but now neer, currently owns the business she knows maybe she can buy inwith a sibling, there’s a significant stead of building from the ground up. age gap. He expects that, one day, Schultz said it’s exciting to hear he’ll take over. He wanted to be pre- about the plans of the people in the pared when that time comes, to un- cohort. The program simply helps derstand the financial and legal par- them connect the dots on how to acticulars of running a business, and cess capital or otherwise finance the Leadership Institute seemed like their goals. a good opportunity.

“I think that’s where this program As part of the first cohort, Hawkins matters, is in helping people achieve has learned about valuing a compa- their dreams and their professional ny, protecting intellectual property goals,” she said. and being competitive in terms of human resources.

Rachel Abbey McCafferty: (216) It’s been “eye-opening,” he said. 771-5379, rmccafferty@crain.com

12 | CRAIN’S CLEVELAND BUSINESS | APRIL 4, 2022

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FOCUS | MANUFACTURING

Manufacturers seek balance in connecting their networks

BY DOUGLAS J. GUTH

Before March 2020, most manufacturers had clearer separation between the IT functions and operational technology that controlled their company’s most critical industrial processes.

As the pandemic raged, businesses were forced to narrow the “air gap” that divided how their computer systems and industrial machines connected to one another. Whether for good or ill, this migration lent insight into a plant’s day-to-day operations for executives working from home, noted Nick Barendt, executive director of the Institute for Smart, Secure and Connected Systems (ISSACS) at Case Western Reserve University.

“There’s always been some IT and OT connection to track product, working processes and inventory,” Barendt said. “If those connection points were not done thoughtfully, they could open up different security risks. The coronavirus accelerated the closing of the air gap.”

Considering industrial set-ups require different safeguards compared with corporate environments, manufacturers must determine how their machines can safely and efficiently talk to one another.

While there’s no perfect answer for network security and functionality, companies that educate themselves about risk and the broader online ecosystem will be best positioned to succeed, said industry experts interviewed by Crain’s.

Barendt, who also directs the Smart Manufacturing Innovation Center (SMIC) at Case Western Reserve, works with manufacturers of

all sizes. Floor layouts can vary dramatically, though Barendt has seen his share of cooperative robots and ERP systems over the last few years.

Machines on the floor were built to last decades, years before cybersecurity and the Internet of Things (IoT) became headline-grabbing terms.

Legacy equipment is therefore more vulnerable to hackers, who may not only steal data, but also gain control of machines to cause all manner of harm.

In today’s Industry 4.0 era, most equipment is going need some level of connectivity. Innately incompatible systems can be linked by edge devices, ensuring data flow and interconnectivity across networks. In a typically sprawling manufacturing facility, these devices deliver detailed, real-time insights into a company’s machines and IoT devices.

Industrial assets can be tracked remotely, allowing personnel to adjust production schedules at speed.

“You need something on the edge of the network doing data acquisition, aggregation and analysis before transmission to a cloud or remote server,” Barendt said. “It could be applied to a larger data center for a bigger company.”

An eye toward efficiency Cleveland’s Manufacturing Advocacy and Growth Network (MAGNET) has seen more makers working toward process automation, a pre-pandemic trend only accelerated by the virus crisis.

“Companies are interested in getting data out of those machines and processes to become more efficient,”

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said Joe Work, senior growth and innovation adviser at MAGNET. “The key thing is efficiency with what they have in place from a staff perspective.

With the labor shortage, companies want to try and make the best use of the staff they have.”

Something as easy as a cable connecting to an ethernet port can retrieve data from a CNC machine.

Builders employing a “continuous improvement mentality,” meanwhile, may require uninterrupted data flow on machine cycle times or part replacements.

Network type often hinges on company size. Smaller companies with less infrastructure, for example, are better suited for a cloud-based system over something built inhouse. Regardless, any manufacturer will need on-site computing able to communicate with equipment in some capacity, Work said.

That’s not to say companies must immediately overhaul their entire systems, he added. Sensors fitted around a power cable can tell facility owners how much juice their machines are using. Simple additions can evolve into more complex configurations, where networks are designed with multiple layers so machines handling industrial controls

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work permissions, either through firewall configurations or the machines themselves. For instance, users can have read-only access to equipment — even from remote locations — that won’t allow them to make modifications to machines.

“It’s a balance for companies thinking about risk scenarios, and what problems they need to solve that they’re granting access to components in the network,” Barendt said. “As companies move down the path with more sophistication, they’ll Striking a high-tech know what to do, and what to avoid.” balance Setting up kiosks on the shop floor A manufacturing execution sys- is another solution, where employtem, or MES, is used by larger firms ees use a web browser to monitor a for real-time data checks and added group of machines, said Work. Execproduct and process quality moni- utives needing guidelines on more toring. Smaller enterprises likely complicated systems should bring in won’t require such a complex sys- an outside IT contractor, or follow tem, and are better served connect- Cybersecurity Maturity Model Certification (CMMC) guidelines to assist ing directly to the cloud, said Work. with compliance around data “WITH THE LABOR SHORTAGE, security. The National Institute Standards and Technology COMPANIES WANT TO TRY AND of (NIST) has a cybersecurity framework for companies MAKE THE BEST USE OF THE seeking to protect their conSTAFF THEY HAVE.” nected systems.

MAGNET president and — Joe Work, senior growth and innovation adviser at MAGNET CEO Ethan Karp said the constant progression of Industry “Starting out, I’d say go with that 4.0 should inspire organizations to cloud system, because it’s the easiest begin their network improvements to set up,” he said. “Then you can immediately.

“Do it now, so in five or 10 years have another level where equipment connects to local devices and never you’re really good at it,” Karp said.

“You’ve got to start small so you can goes to the cloud.”

Layering networks is one powerful benefit from the new tools and contool for hardware protection and nectivity coming online.” connectivity; another is controlling user access, said Barendt of Case. Contact Douglas J. Guth: Employees should have limited net- clbfreelancer@crain.com

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“Don’t get into a byzantine situation where you’re going through four or five layers,” said Work. “We’re talking three or four ways of segmenting the network. There may be only two layers for your business and manufacturing system. For companies with simpler machinery, it’s better to (build a network) in a more simple manner.”

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APRIL 4, 2022 | CRAIN’S CLEVELAND BUSINESS | 13

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PRIVATE SCHOOL PLANNER YOUR GUIDE TO NORTHEAST OHIO SCHOOLS

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HEALTH CARE

Study: Five conditions total 50% of health care costs

BY LYDIA COUTRÉ

Just five conditions — cancer, musculoskeletal, cardiovascular, gastrointestinal and neurological — account for 50% of health care spending, according to a study conducted

by UnitedHealthcare and Health Action Council.

The fifth annual joint white paper, “Costly conditions: Identifying and addressing top clinical cost drivers,” analyzed national data from more than 320,000 covered lives within the membership of HAC, a nonprofit coalition based in Independence that represents midsize to large employers across the country. Roughly half of those employees and family members had claims for at least one of the five conditions.

Employers looking at their annual data often know that they have a group of high-cost claimants, but if they don’t know why or what specific condition is driving those trends, they don’t know how to best address those costs, said Patty Starr, president and CEO of HAC. The study aimed to identify demographic or regional trends, “so that employers could actually make better decisions moving forward, and may also change the benefit structure,” she said.

The white paper found that cancer accounted for 15% of costs, with chemotherapy being the primary driver within that category. Musculoskeletal claims were the second-largest

Health Action Council spend by condition Half of Health Action Council’s more than 320,000 covered lives had claims for one or more of these conditions.

These conditions cost Health Action Council plan sponsors an estimated $1.9 billion in total.

% % % % 3% lar 9 nal 7 logical 6 er 15 tal 1 ascu ointesti kele o Canc v r s o u i o l e r d N cu Car Gast Mus

Kurtzweil

Starr

portion, at 13%, followed by cardiovascular (9%), gastrointestinal (7%) and neurological (6%).

Through wellness programs and plan design, employers have typically spent a lot time focusing on addressing the high costs of cancer, musculoskeletal and cardiovascular claims, which are conditions people generally understand and are familiar with, said Craig Kurtzweil, vice president of the Center for Advanced Analytics at UnitedHealthcare.

In focusing on those conditions, other areas that drive costs and

Other conditions 50% SOURCE: UNITEDHEALTHCARE AND HEALTH ACTION COUNCIL STUDY

“might be ripe for more impact” can be forgotten, he said, so it’s important to broaden the perspective to different health topics.

“A lot of employers have spent a lot of time strategizing around the right cancer program, or a way to prevent heart disease, the right way to think about alternative forms of treatment for back pain, things like that — it’s just been around so long that everyone’s kind of thought about it and strategized around it,” Kurtzweil said, adding that those efforts are still crucial. “But I can tell you very rarely has an employer thought about a gastrointestinal health program to really focus on.”

And though some conditions may not be as prevalent, they’re growing and have other implications. For instance, neurological and gastrointestinal issues affect not only health costs, but also productivity, he said.

“It’s really hard for some of these conditions for employees to be pro-

ductive and live a normal life kind of working and going through some of these things,” Kurtzweil said. “So if you add the productivity, presenteeism to the health care costs, some of these topics should be making headlines (but) just haven’t so far.”

The white paper offers suggestions for employers to help control costs, including employee engagement and increased transparency.

With employees staying in the workforce longer, it’s important to be mindful of the normal aging process, Starr said.

“As employers, we have a population that is aging,” she said. “There’s new awareness points from when diseases onset. There may be more cognitive or psychological changes, or social or environmental changes that are occurring on a regular basis than what we had seen in the workplace up to this point.”

Wellness programming and other initiatives in the office need to recog-

nize that and perhaps be tailored to different populations within a workforce, Starr said.

Other cost control suggestions she highlights are including elements of cardiovascular health to all wellness and engagement programs and, given technological advances, adding genetic testing to plans when clinically appropriate for employees to receive access to necessary resources and potentially eliminate waste in the system.

Another possible measure for employers with broader geographic footprints is examining practice patterns by geography to see if there are differences in costs, adoption of best practices or under/over-treating. To address such differences, the study suggests options such as offering referral incentives, adding regional Centers of Excellence to plans and working with a third-party administrator to conduct provider outreach to improve quality of care.

“I think that one of the key elements, from a benefit standpoint, that we all have to recognize is where your employees live not only affects their health, it also affects the provider billing patterns, and employer spend for these conditions,” Starr said. “So I kind of think that premise is a nice reset when you start looking at the benefits structures.”

Lydia Coutré: lcoutre@crain.com, (216) 771-5479, @LydiaCoutre

FINANCE

Unison Risk Advisors ready to ramp up acquisitions

BY JEREMY NOBILE

As Unison Risk Advisors — the Cleveland-based parent of insurance brokerage, risk consultant and employee benefits firm Oswald Cos. — closes on a recent private equity investment, the business is laying the groundwork for a more aggressive M&A strategy.

The company is shuffling around some key leadership positions to facilitate this.

Among those moves is the promotion of Jessica Jung, Oswald’s managing director of property and casualty — a business that has grown 50% in the past five years under her guidance Jung — to president.

Jung, the first woman to hold that role at Oswald, replaces Dave Jacobs, who has served Oswald as chief operating officer since 2006 and president since 2011.

“Jess is a proven leader.

She came here with high expectations that we had of her, and she has delivered,” Jacobs Jacobs said.

This key transition follows Jacobs moving to the role of vice chairman for Oswald, which no longer will have a COO position — at least for now.

In his new post, Jacobs will lead all M&A activities for URA in conjunction with Oswald and URA chairman Bob Klonk, as well as URA president

Bob Cawley, who also leads Oswald’s Baltimore sister company RCM&D as CEO. The company already is close to completing its first deal following the private equity deal, with a so-far-unidentified firm in the Cincinnati market that will build on its operations down there.

RCM&D and Oswald announced a merger in December 2020 that established URA, which is the DBA of the JBO Holding Co., Oswald’s legacy parent organization.

Then, in March, an investment in URA by Canadian company Peloton Capital Management was announced that gives the private equity firm a minority stake in the still-employee-owned business of approximately 30%.

Financial terms of that deal have not been disclosed.

“That investment has certainly been a catalyst for us to take on some new roles and changes,” Jacobs said. “Our strategy has changed a bit in that we have a pretty high expectation around both organic and acquisitive growth. So we need to put more dedication around M&A.” The firm had also been talking about how “we need to get the next generation of leadership prepared and stepping into bigger roles,” Ja-

The downtown Cleveland headquarters for Oswald Cos. | CONTRIBUTED

cobs added, noting the partnership with Peloton offered an opportunity to do just that.

“We are taking a fresh look at internal talent,” Jung said. “We have a lot of folks who could not be more energized to focus on their next chapter.

And we want to be magnetic in attracting clients and partners for our platform. I think the way we put our heads together on this will be good for clients and our people.”

Among other personnel changes, RCM&D has named a new president in Matt Kahn; Cathy Kosin will take over Jung’s role as managing director of property and casualty; and Steve Baltas has been appointed to a national-level sales director role on the benefits front for URA. Additionally, Oswald said it will be

expanding into the Pittsburgh market, where it’s opening an office at Penn Center West Two in early April.

That region through Youngstown comprises a segment that will be overseen by newly appointed market leader Michael Clark.

URA operates 13 offices across five states — Ohio, Michigan, Pennsylvania, Virginia and Maryland — and Washington, D.C. As far as the M&A strategy, Jacobs said the plan is to have platform agencies around the country and complete bolt-ons for those. There will remain a large focus on targets in the Mid-Atlantic and Midwest regions.

“The model is one we are calling ‘empowering independence.’ We want these platforms to have the au-

tonomy to operate independently,” Jacobs explained, emphasizing URA’s culture as an employee-owned firm inspiring this approach. “We are really focused on allowing independence and being a differentiator as opposed to other aggregators.”

URA ranks among the 30 largest brokerage firms in the U.S., with approximately 625 employees.

Oswald ranked as the 96th-largest privately held company in Northeast Ohio in 2021, according to Crain’s research, with $103 million in annual revenue in 2020. Combined total revenue for URA that year was approximately $140 million.

Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile APRIL 4, 2022 | CRAIN’S CLEVELAND BUSINESS | 15

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RETAIL

From Page 1

Urban Air also is a flexible franchise, Grambo said, so he was able to pick and choose the activities for each location. The 47,000-squarefoot Crocker location has go-karts, he said, while the 30,000-squarefoot Copley store has bumper cars, but with a twist, as they are in a sphere that allows drivers to rotate in multiple directions as they proceed.

“You can’t do this if you are faint of heart,” Grambo said.

He landed at Crocker for a simple reason. He was looking for a location in Cleveland’s east suburbs when Stark Enterprises approached him about the west suburban mixed-use center with stores, offices and apartments.

“I asked, ‘Are you crazy?’”Grambo recalled. “But it was very intriguing to me.”

The location also broke the Urban Air standard of setting up shop in a freestanding retail location where below-market rents are available. For example, his Copley

Urban Air is in a former H.H. Gregg appliance store building. Typically, Urban Air goes into warehouse-style buildings. Instead, the Crocker Park site has a long line of windows originally designed to serve as storefronts. Grambo likes the addition of the natural light.

Moreover, the windows will allow an ever-changeable lighting system in the amusement center to be visible from the outside.

For the landlord’s side, the attraction is in bringing people to the center.

Ezra Stark, chief operating officer of Stark Enterprises, said in an interview that retail is evolving along the lines of attracting people who may shop while they are out.

“When people attend a concert at Crocker Park, they may say, ‘Let’s check out the Dick’s Sporting Goods while we’re here,’” Stark said. “Otherwise, they would just buy tennis shoes online.”

Another unexpected addition to a traditional retail space is at Avon Commons in Avon. That’s where an XGolf location is operating in a storefront last occupied by a Pier 1 home decor store. The golf is via

new-breed, precision golf simulators, but other offerings include lessons, food and beverages.

Mitchell Schneider, founder and president of Avon Commons owner First Interstate Properties of Lyndhurst, said XGolf likely is the most entertainment-oriented of shops in the firm’s portfolio. However, he points out that a medical clinic at one of First Interstate’s Mentor locations fills the same bill.

However, Schneider views changes as part of the nature of retail.

“The retail industry is in a constant state of evolution. It has been as long as I’ve been involved in the shopping center business,” he said.

Retailers themselves are embracing experiences to adapt to changing times.

For example, Dave Ferrante, the owner of Visible Voice Books in Tremont, said he feels his store was saved during the “COVID-19 TURNED THE WORLD worst parts of the panUPSIDE DOWN. AS THE SAYING demic by launching a proGOES, ‘NECESSITY IS THE MOTHER gram that allowed people to rent the bookstore for a OF INVENTION.’” group for 90 minutes and — Dave Ferrante, the owner of Visible Voice Books share a pizza.

“We didn’t feel comfort“It’s a necessary service,” Schnei- able opening up the store on a typical der said, which typically requires a basis,” Ferrante said, in the early days of the pandemic, but he also found physical presence.

“There’s no question that finding people wanted to enjoy safe opportutenants in the retail-service arena nities to gather. “We found every slot that draw customers to their spaces was booked,” he added.

As pandemic protective measures and offer experiences that are not available digitally will be an increas- eased, the store has kept the program ingly important component in a suc- in place for one night a week and for cessful shopping center,” Schneider brunch on the weekends. The next step may be incorporating into the said.

program food from Proof Craft BarBQ and Cocktails, which is in the same building that houses Visible Voice.

Ferrante said he believes landlords are a little more open to new ideas today than in the past.

“COVID-19 turned the world upside down,” Ferrante said. “As the saying goes, ‘Necessity is the mother of invention.’”

At Urban Air, the offerings also include fast-casual food, along with wine and beer. There are eight rooms designated for birthday parties and similar functions, some located on a mezzanine. Occupancy at the Westlake Urban Air is technically about 700.

Based on other Urban Air locations and his experience, Grambo estimates the children’s amusement center should draw more than 10,000 visitors monthly.

Even in times when traditional retail wasn’t under siege from online shopping, those kinds of visitor figures would draw attention from any sharp landlord or leasing agent.

Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

INTEL

From Page 1

“collaborative, multi-institution research and education program that will emphasize gaining real-world experience and innovating in semiconductor fabrication.”

Between five and 10 proposals are anticipated to be funded in this first round. There are about 185 public universities, regional branch campuses, private colleges, community colleges, and adult workforce and training centers across the state.

Portions of the funding will go toward things like curriculum development, faculty training and lab upgrades. A 28-page PowerPoint shared during a March information session highlighted how Intel plans to evaluate institutions’ proposals, a list that includes increasing minorities in STEM, cross-institutional engagement, and relevance to Intel, Ohio and the industry as a whole.

Responses to the RFP are due at the end of May. Intel plans to respond by the end of June, with a planned start by August. Though things are still fluid, a preliminary road map for how the region’s largest institutions plan to position themselves in the funding race is emerging.

The choice to build near the state’s capital, of course, means a close distance to Ohio State University. The Buckeye State’s flagship university enrolled nearly 62,000 students last fall and is one of only five R1 universities in the state.

That distinction means an institution has a very high level of research activity.

By comparison, Cleveland State University had a full-time enrollment of about 12,000 students in fall 2021. CSU and many local institutions have seen declining enrollments amplified by the pandemic.

Meredith Bond, CSU’s interim vice president for research and innovation, believes the institution aligns well with what Intel has outlined. She said the university is building programs to support computation-based research. There have been additional faculty hires recently, she added, and many are coming in with new ideas as well as their own grant funding.

A rendering shows early plans for two new leading-edge Intel processor factories in Licking County, Ohio. | INTEL CORPORATION

“I am convinced we have people who have expertise, the intellectual power and knowledge that would go up against anybody else, not just in the state of Ohio, but in the country,” said Bond.

Plus, Bond said, it’s “very clear” that Intel doesn’t want to see each institution work separately. The secret sauce for Northeast Ohio to be competitive, then, could be its strength in numbers. There are nearly 30 nonprofit colleges and universities across the region.

Partnerships and pipelines of various types already exist between institutions, as well as with local companies that provide students with hands-on learning experiences.

The University of Akron, for example, already has worked and established relationships with manufacturers such as Schaeffler, Goodyear,

Timken and Parker Hannifin. Officials said they’re planning to figure out ways UA’s STEM programs and graduates can help Intel.

Kent State University is another place planning to highlight collaboration. The university is putting together a team from KSU and surrounding — though unnamed — higher ed institutions “to develop a proposal responsive to the needs of Intel and our students,” said Doug Delahanty, interim vice president for research and sponsored programs, in a statement provided to Crain’s.

“As an R1 research institution with a focus on access and completion, this funding will provide wonderful opportunities for the students we serve,” Delahanty said.

Kent is Northeast Ohio’s largest institution in terms of full-time enrollment, as well as its only public R1

university. The only private R1 in Cleveland is Case Western Reserve University.

Representatives from Intel have already visited the University Circle campus, according to CWRU officials. The visit included meeting with engineering faculty members who work on research linked to the semiconductor industry and touring the campus’ facilities.

That visit showed the university’s “significant” capacity to provide “exceptional, experiential-based education” in the semiconductor industry, school officials said, adding that the institution already has graduates working in semiconductor firms on the coasts.

Intel’s Ohio investment is expected to generate about 10,000 jobs, along with scores of other employment opportunities that will support what In-

tel is doing. The jobs are expected to require a variety of certifications and degrees.

“While details are still in the works on our potential role alongside Intel, we believe that 70% of the 3,000 factory jobs will require an associate’s degree — with many of those career training programs already in place at Cuyahoga Community College,” said William Gary, executive vice president of workforce, community and economic development at Cuyahoga Community College, in a statement to Crain’s.

Intel also is earmarking an additional $50 million in national funding opportunities, an amount that will be matched by the National Science Foundation.

Amy Morona: amy.morona@crain. com, (216) 771-5229, @AmyMorona

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LAKEFRONT

From Page 1

— a goal announced by County Executive Armond Budish in his 2019 State of the County address — can be accomplished in two ways: by purchasing and redeveloping properties in strategic locations, or by working with private landowners to form partnerships that exchange public access easements for erosion protection funding.

The recent Cuyahoga County Lakefront Public Access Plan lays out a series of design and funding scenarios that would create a span of multi-use paths, hiking trails, boardwalks and scenic bridges on the lakeshore. But without strategic agreements involving private landowners, public access to more than half of the Cuyahoga County shoreline is not even in play.

After a push of public engagement and months of stakeholder meetings last year, Michael Dever, the county’s director of public works, said that many lakefront property owners are at least interested in hearing about a public-private partnership.

“I still get calls from people who say they don’t even want a picture showing their property in any type of waterfront development project plan and to just stay away,” Dever said.

“But there are others that have come to us and said they had been trying to figure out how, as a group or by joining properties together, they could pay for a retaining wall, and they are excited about the program.”

Retaining walls and other mitigation efforts can be cost-prohibitive for many who live on the lake, Dever said. Homeowners and even homeowner associations often struggle to find the extra cash when the cost of a retaining wall can range anywhere from $3,500 to $12,000 per linear foot.

But with higher lake levels and warmer temperatures — leading to punishing waves throughout the winter when the lake freezes less frequently — shorelines are eroding faster.

The lakefront plan has identified 41 potential public-private partnerships: 22 west of downtown, with a collective price tag of more than $198 million; and 19 east of downtown, expected to cost more than $86 million in design, planning and construction costs.

“We are not be able to spend public dollars on a private property, but in exchange for a public easement, the county can leverage dollars to come and fix and add value to that property,” Dever said.

More than two-thirds of property owners surveyed regarding their interest in a potential public-private partnership expressed a willingness to “at least consider” a proposal, he noted.

“It really comes down to educating, sitting down and talking to people, letting them see what else we can look like,” Dever said. “There is some general fear of losing property to eminent domain or that there will be an increase in crime or vandalism, but that’s really unfounded. And sitting down with people and showing them examples of other projects really helps.”

Communicating “early and often” is key to bringing people to the table, said Euclid Mayor Kirsten Holzheimer Gail. Her city’s lakefront development and trail project, which includes several property easements from private owners, is a model for the county’s plan.

“IT REALLY COMES DOWN TO EDUCATING, SITTING DOWN AND TALKING TO PEOPLE, LETTING THEM SEE WHAT ELSE WE CAN LOOK LIKE. THERE IS SOME GENERAL FEAR OF LOSING PROPERTY TO EMINENT DOMAIN OR THAT THERE WILL BE AN INCREASE IN CRIME OR VANDALISM, BUT THAT’S REALLY UNFOUNDED. AND SITTING DOWN WITH PEOPLE AND SHOWING THEM EXAMPLES OF OTHER PROJECTS REALLY HELPS.” — Michael Dever, Cuyahoga County director of public works

Lakewood’s Gold Coast shoreline, top, is a focus area under development. Above, an example from the Cuyahoga County Lakefront Public Access Plan shows shoreline development with erosion control and a multi-use path. | CUYAHOGA COUNTY AND THE SMITHGROUP

“It started with our community plan, where we spent time upfront (to include) input from the community, especially from the private property owners,” Holzheimer Gail said.

There was some pushback from private lakefront owners worried about possible negative impacts of having the public on their property, she said, while other parts of the community questioned why public dollars were being spent on private improvements.

Eventually, through constant communication and transparency, Euclid city leaders convinced residents — both on the lake and off — that the project was mutually beneficial in terms of erosion control and public access for the whole community.

Allison Lukacsy-Love, who as Euclid’s director of planning and development helped lead the final stages of the project, echoes the mayor’s emphasis on community engagement.

“These projects are hinged on public buy-in,” she said.

Buy-in, however, is just the first step to what is a laborious process.

Euclid’s 0.75-mile trail required more than 100 pieces of legislation, which came from multiple levels of documentation and individual memorandums of understanding (MOUs) unique to each privately owned property, said Lukacsy-Love, who now is senior director of major projects with the Greater Cleveland Partnership.

“Some of the MOUs were 14, 15 and 20 pages long,” Lukacsy-Love said. The original agreements were so detailed that when it came to writing up the legal easement agreement, the MOUs were “exhibit A,” but it was the “documenting and capturing our intentions in detail that gave the landowners the confidence to move forward,” she said.

The Euclid project was the first in the county to use a total of more than $3 million in the Federal Emergency Management Agency’s Hazard Mitigation Grant Program, which provides funding to mitigate “future disaster losses in their communities.”

The program helped ensure the viability of the high-rise apartment buildings on Euclid’s shore.

Dever said the county plans on going after those FEMA funds — along with county casino revenue, Ohio Department of Natural Resource water conservation money and other funding — for four near-term projects already underway as part of the public access plan.

Two of the projects have preliminary agreements with private landowners: the Beulah Park-Euclid Beach connector, an $11 million project to expand 2,300 feet of privately owned lakefront in Euclid; and a $25 million-$30 million project spanning nearly a mile of Lakewood’s Gold Coast, one of the county’s most densely populated residential areas.

The Beulah Park project is in the permitting phase, with construction set to begin in 2023. The Lakewood project is expected to begin permitting in 2023 as preliminary design and engineering wraps up.

All the agreements eventually will need approval from Cuyahoga County Council.

“There is a clear understanding that these funding opportunities are not going to be around forever, and now is the time to take advantage of them, because this is really for the benefit of everyone,” Dever said.

Kim Palmer: kpalmer@crain.com, (216) 771-5384, @kimfouroffive APRIL 4, 2022 | CRAIN’S CLEVELAND BUSINESS | 17

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THE WEEK NEW VISION: A fast-growing insurance company anchors a new iteration of a mixed-use plan to redevelop the former Lakewood Hospital site. Lakewood-based Roundstone Insurance plans to move its headquarters to the $90 million-plus development that’s also slated to include roughly 200 apartments, upward of 29,000 square feet of commercial space, a garage and a public plaza. The proposal is a fresh version of a plan five years in the making. Developers Casto and North Pointe Realty aim to break ground this year and to complete much of the project in 2024. Casto executive Brent Sobczak and Mayor Meghan George recently signed a term sheet that lays the groundwork for a more detailed development agreement. Lakewood City Council is scheduled to review the term sheet and plan Monday, April 4.

helps banks and credit card issuers to better understand and react to customer account and transaction data, was bought for just over $135 million.

Alkami Technology, a Plano, Texas, firm that works with U.S. financial institutions on digital banking services, announced Monday, March 28, that it has entered an agreement to acquire Segmint. Alkami provides an online banking platform it says enables smaller banks and credit unions to compete with much larger financial institutions.

It said it will combine the two companies’ data sets to enhance its offerings, while also increasing the precision and applications for Segmint’s data models. Alkami said it expects the acquisition to expand its addressable market by approximately $1 billion and to provide it with more cross-selling opportunities across a larger customer base.

DEAL IS ALCHEMY: Cuyahoga Falls’ Segmint, the data analytics firm that

STEEL RESOLVE: The Cleveland Cavaliers have a new jersey patch sponsor:

steel company Cleveland-Cliffs. The multiyear agreement — the Cavs would not disclose the exact length or the financial terms — begins in 202223 and serves as an expansion of their current partnership. Cliffs already sponsors an entrance to Rocket Mortgage FieldHouse. Akron-based tiremaking giant Goodyear was the previous jersey patch sponsor. It will continue to sponsor the Cavaliers, but after evaluating the patch program, “they decided to get into other assets, from a partnership perspective,” said Nic Barlage, the Cavs’ president of business operations.

MORE TO COME: Embers are starting to flare in the long-pending foreclosure proceeding in the Cuyahoga County Court of Common Pleas on the 15-floor IMG Center, 1360 East Ninth St. Cuyahoga County Magistrate Jim L. Jackson ruled March 25 that the building’s owner, 1360 East Ninth CLE LLC,

PEOPLE ON THE MOVE

which does business as IMG Center, had defaulted on a $16 million mortgage on the property. He also ruled that the lender, a collateralized mortgage-backed securities special servicer called RSS UBSCM2018C9-OH IMG LLC, was entitled to have the property sold or obtain the keys itself. However, the magistrate’s decision is not the final word in the case. Judge Daniel Gaul may overrule the decision. The case also would not be finished until a judgment is entered by the judge. The magistrate’s decision also is subject to appeal by several parties with interests in the property. Building owner Jim Breen, who heads 1360 East Ninth, could satisfy the mortgage by ponying up a total of $20.6 million to cover remaining principal on the 2018 loan, interest, fees and costs of the proceeding.

ON THE GROW: Two technology-driven companies plan to add 200 jobs in Northeast Ohio after their expansion

plans were approved Monday, March 28, by the Ohio Tax Credit Authority.

ZIN Technologies Inc., a provider of advanced engineering and product development services for NASA, the U.S. Department of Defense and private industry, announced plans to add 125 jobs. Axuall Inc., an IT/software company providing workforce intelligence and digital credentialing for health care, plans to add 75 jobs. The tax credit authority approved a nineyear, 1.913% Job Creation Tax Credit for ZIN Technologies’ Middleburg Heights expansion. The state said ZIN Technologies’ growth will generate $11.8 million in new annual payroll and retain $17.4 million in existing payroll, from 191 positions. Axuall received an eightyear, 1.77% Job Creation Tax Credit for its Cleveland project. The tax credit authority said Axuall’s plan will generate $7 million in new annual payroll and retain $1.3 million in existing payroll, from 13 positions.

Advertising Section To place your listing, visit www.crainscleveland.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

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Meaden & Moore is happy to announce the promotion of Jill Crawford to Director.

Jill is a member of our Tax Services Group in our Akron office and has over 20 years of public accounting and private industry experience.

She provides strategic tax, accounting and business advisory services to companies and their owners in a variety of industries.

She focuses her practice on multistate income and sales/use taxation as well as corporate and “flow-through” entities.

It is Meaden & Moore’s pleasure to announce the promotion of Melissa Gallop to Vice President Principal.

Melissa is a member of Meaden & Moore’s Tax Services Group and is based in our Cleveland office. She focuses her time on individual tax compliance and planning working primarily with our Personal Tax Advisory Group.

She consults directly with business owners, investors, and high net worth clients advising them on personal tax and wealth preservation issues and opportunities.

It is Meaden & Moore’s pleasure to announce the promotion of Pam Landis to Director. Pam is based in our Wooster office and works in our Tax Services Group. With over 20 years’ experience in public accounting and industry, she focuses her practice on tax matters for companies in a variety of industries. Pam has experience in serving the consulting and compliance needs of many of our clients at both the individual and corporate levels.

Meaden & Moore is happy to announce the promotion of Michelle O’Gara to Vice President Principal. Michelle works in Meaden & Moore’s Tax Services Group and is based in our Cleveland office. She is a corporate tax specialist working with a variety of clients on federal compliance and tax technical matters. She manages many tax client relationships and is tenacious when it comes to client service and meeting expectations. She is also very active in merger and acquisitions.

Meaden & Moore is pleased to announce the promotion of Karin Spoerke to Director. Karin has over 20 years’ experience in public accounting and providing advisory services to privately held companies. She is in our Cleveland Office and part of the Assurance Services Group. Karin is in her element when she is on-site listening to her client’s needs and working together with them to develop solutions to whatever business concerns they may have.

AUTOMOTIVE REAL ESTATE

Transtar Industries Transtar Industries is proud to announce Anna Gluck has been promoted from Vice President, Human Resources to Executive Vice President, Human Resources. This exciting expansion of her role represents further investment in Transtar’s employees and culture. Transtar Industries is the leading distributor of automotive aftermarket parts and software solutions.

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REAL ESTATE CONSTRUCTION

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AMHigley The Albert M. Higley Co. is happy to announce the hiring of Conor Evans, Regional Vice President, New Jersey.

Conor’s hire signifies the opening of AMHigley’s new office located in Morristown, New Jersey and the commitment to growing the firm’s footprint within the state.

As a Morristown Resident, Conor joins our team recognizing the opportunity to build relationships and build community by finding ways to add value within the construction industry of Central and North Jersey.

HEALTH CARE

orthobrain® orthobrain® – an orthodontic growth company with a total solution that makes integrating orthodontics into dental practices easy and profitable – has announced the hiring of Jody Rodney as Senior Vice President of Marketing and Education. In her role, Rodney will bring her extensive experience implementing strategic plans and her global networks within the dental industry to drive orthobrain’s overall business strategy.

The SVN Summit Commercial Real Estate Advisors team is welcoming Brian Foster as a new Associate Advisor.

Brian is a graduate of The University of Akron with a bachelor’s degree in science with a concentration in corporate finance and financial planning.

He will focus on the development of new business in investment (NNN), multifamily, office, and specialty-purpose commercial real estate in the Northeast Ohio area.

SVN Summit Commercial Real Estate Advisors The SVN Summit Commercial Real Estate Advisors team is welcoming Tyler Robin as a new Associate Advisor.

Tyler comes to SVN with extensive experience in manufacturing and distributions management. As a graduate of The University of Akron, he has a bachelor’s degree in business administration focusing in sales management and marketing.

He is uniquely qualified to understand the needs of industrially minded clients and will specialize in industrial sales and leasing, as well as land development.

18 | CRAIN’S CLEVELAND BUSINESS | APRIL 4, 2022

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